South African private equity firm Ethos has announced a divestment from Brandcorp Holdings, a distributor of industrial and consumer products, to the Bidvest Group. 

No financial terms were disclosed.

The acquisition is subject to regulatory and other conditions.

Brandcorp is a holding company of businesses involved in the distribution and reselling of a wide range of niche, high-quality industrial and consumer products in southern Africa.

Brandcorp owns well-known brands across its individual businesses, as well as distribution rights (exclusive and otherwise) for leading local and international brands.

Ethos Fund V acquired and delisted Brandcorp in 2007, with the aim of accelerating growth and strategically re-positioning the company. 

Together with management, Ethos has achieved this goal by actively enhancing Brandcorp's strategy, operations, leadership capacity and finances.

These activities have resulted in various strategic acquisitions including Renttech and Burncrete; introduction of a BEE shareholding facilitated by the DEG, plus Sphere Private Equity; capacity expansion following warehouse development; management team enhancement; and comprehensive strategic review of the businesses in a major division to position for sustainability in a changing environment.

Furthermore, Ethos successfully recapitalized the business in 2010 via a R750m high-yield bond placement. 

"Such initiatives reaffirm Ethos' ability to identify attractive opportunities and work with management teams to create long-term value that is predominantly derived from earnings and revenue out-performance," commented Ethos Partner, Shaun Zagnoev. 

“Our ability to grow companies, even during challenging times, has made Ethos the partner of choice for successful management teams who have a desire to explore corporate change and growth," he said. 

Bidvest considers the Brandcorp Acquisition to present an attractive investment opportunity which is aligned with Bidvest’s strategy of expanding its business operations through value accretive acquisitions.

Bidvest’s commercial products (BCP) division, which Brandcorp will form a part off, includes various industrial and consumer businesses such as G.Fox, Plumblink, Home of Living Brands, Berzacks, Yamaha and Academy Brushware.

“BCP could complement Brandcorp’s offering and opportunities exist for both BCP and Brandcorp to leverage off each other’s client base, expertise, resources and network to significantly grow revenue and earnings,” Bidvest said in a statement.

The sales process was coordinated by Rand Merchant Bank Corporate Finance and Webber Wentzel.

Standard Bank of South Africa acted as a financial advisor to the Bidvest Group, whereas Werksmans Attorneys acted as legal advisors.